Yield To Worst
Yield to Worst (YTW) is the lowest yield a bondholder could receive, accounting for the bond’s embedded options and current price, by evaluating yields to all relevant redemption dates and choosing the smallest value.
Example: A $1,000 corporate callable bond priced at par has a yield to maturity of 3.6%, but the yields to its first and second call dates are 3.2% and 2.9%; the yield to worst would be 2.9%.
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